Enabling Technology

Talent Management Programs Catch Up Through Tech Innovation

With suites of offerings in the marketplace, HR organizations may find the task of managing talent easier and more valuable than ever.

by Andy Teng

No HR responsibility is undergoing more transformative change than talent management, and no resource has been more empowering than the technology tools that are the foundation on which employers are acquiring, training, rewarding, and retaining their workers.

Because of their powerful functionality, broad reach, and integrated services, today’s talent management technology has given HR organizations more capabilities than ever before—tools to forecast human capital needs, to find and hire appropriate candidates, to reward performance with competitive compensation, and to line up talent that will serve as tomorrow’s leaders. In just the past few years, a bumper crop of on-demand, subscription-based services has helped organizations to automate, document, standardize, and overall improve how they manage talent. And according to industry observers, the plethora of functionality in the marketplace today is just the tip of the iceberg as the technology behind these services is further refined to meet the growing demands of productivity-obsessed business leaders.

These improvements couldn’t come soon enough as HR leaders are already chomping at the bit to elevate the effectiveness and efficiency of their talent management pro­cesses. In a study of 182 mid-size and large companies last year, Watson Wyatt, in its study “Changing Strategies in HR Technology and Outsourcing,” found that most companies surveyed are satisfied with how they deliver services such as retirement benefits and health and welfare but disappointed in the way they handle talent management. While satisfaction rates were generally around 80 percent for the quality in which benefits administration and health and wealth are delivered, satisfaction with quality of service in talent management was less than 50 percent, the study found. That ranked at the very bottom among various HR services.

Rick Hubbard, North American practice director for technology and administration solution at Watson Wyatt, said the survey showed that the talent management market is one of the most dynamic in HR technology today. At the same time, it’s also one of the most confusing and least mature segments, with a broad range of products and platforms to choose from but no clear de facto standard platform. Still, the market offers HR organizations a cornucopia of riches to choose from and huge market opportunities for the vendors in the space.

“The hot area of the market we see is all the elements around talent management —how do we pay our people, how do we recruit them, and how do we train them,” Hubbard noted. “A lot of areas will be ripe for development. I believe in the next couple of years, ERPs will strengthen their capabilities…. Software on demand—that has a long ways to play out.”

Indeed, interest in raising organizations’ talent management efficiencies is drawing buyers and technology companies to the marketplace. At the same time, HRO service providers also benefit from this movement because they are partnering with some software specialists to broaden scope of service that they couldn’t otherwise deliver on their own. In fact, according to some talent management solutions companies, outsourcing service providers have become important partners in their efforts to penetrate the HR market.

“In the past, outsourcing was always a great value because it removed a lot of administrative burdens and processes and automated things like payroll and benefits. These services weren’t necessarily super strategic. Now, with the advent of talent solutions, and when you combine it with outsourcing, it makes them more powerful. Not only can you remove the administrative burden, you can also drive a higher level of performance,” said Stacey Epstein, vice president of marketing communications at SuccessFactors, which has a suite of talent and performance management products used by more than 2,000 corporate clients and 4 million users.

She pointed out that continuously evolving talent management technology enables HRO service providers to support their customers in ways not previously possible. Because they already administer many high-volume transactional functions such as payroll, outsourcing service providers can easily manipulate and integrate that data to give managers and executives greater visibility of their talent needs. Moreover, organizations now have more options to outsource, especially in areas such as succession planning, performance management, compensation planning, and others.

Whether they embrace a more powerful solution through outsourcing or on their own, one thing is for certain: HR organizations still entrenched in paper-based methods will be changing their ways. According to Watson Wyatt’s survey, more than 30 percent of companies surveyed said they planned to migrate from paper to automated systems in the areas of recruitment and succession planning in the near future. Most will do so through either add-on functionality with their internal HRIS or HRMS or through on-demand services such as SuccessFactors or other services; a markedly lower percentage plan to approach this with a standalone in-house application.

Powerful Interfaces
The survey revealed that among various components of talent management, services such as compensation administration and annual pay and bonus delivery are most mature, with a majority of companies already using some kind of technology solution. However, services around succession planning and workforce planning were the least automated, with a majority of companies still creating paper trails. The upside is that many plan to invest in more technology in support of their programs.

Even better news for HR organizations that are now investing in talent management technology is that they can expect truly robust functionality from the services out there. Take Authoria’s suite of products, which includes modules for recruitment, compensation, succession and development, performance, and communications. Like other offerings, it gives users the flexibility to use only the services they need and add others later on. It boasts a simple-to-use talent profile for each employee that contains all relevant information, including assessment data, work history, competencies, skills gaps, and more. Peter Cohen, vice president for product marketing at the company, said its talent profile feature is like a Facebook page for professionals. “This is powerful because it’s all searchable. Now if I want to search for a particular engineer, I can put in my criteria,” he noted.

He said one key element of the system is its usability. Because the interface is both easy to use and powerfully flexible, managers and employees can all access and generate data in the manner they need. Older talent management systems or tools required training and only HR professionals often had access. The current generation is intended for use by everyone in the organization so they can continuously track performance and talent needs.

Another distinction between older systems and cutting-edge technology is integration. Cohen said standalone talent management applications may be on their way out as suites replace them. For instance, a standalone applicant tracking system can do little to provide information on quality of hire, but when it’s part of a suite of services, it allows a manager to view the effectiveness of, say, internal succession planning or external agency usage. Analytics become easier to undertake as well because all relevant data for a particular employee are contained in one place. “It offers a great deal more value,” he contended.

As HR organizations undertake transformational initiatives to support the goal of the business, it’s clear that talent management will be a cornerstone of that effort. Sure to be a complex and resource-intensive task, the move to bring many of these services into the 21st century will also have clear rewards and a profound impact on how companies fulfill their talent needs. Even as they face such a sizable chore, HR leaders can be comforted in knowing that a cornucopia of technological tools are available at their disposal, and capable of supporting these transformational aspirations far down the road.

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